Ballmer Acknowledges Mistakes, Offers Insights on Roadmap at MIX08

In a rare display of contrition, Microsoft CEO Steve Ballmer yesterday acknowledged
frustration with the acceptance of Windows Vista and the company's failure to
upgrade its Internet Explorer browser more routinely, as well the questionable
decision to pursue separate development paths for Internet Explorer and the
.NET Framework.

Speaking at his MIX08 keynote address in Las Vegas, Ballmer acknowledged that
tying IE to the operating system may have stifled innovation, given it was well
over five years between the releases of IE 6 and IE 7, both of which were tied
to the releases of Windows XP (released in 2001) and Vista (released last year).

"That was a painfully long gap between releases of browser innovation," Ballmer
said. "You won't see those kind of gaps on Windows. I think we now understand
how we get things enough decoupled to incubate new innovations in the browser
separate from the operating system and then roll them back into the operating
system."

Those remarks were particularly noteworthy given that Microsoft officials took
the hard line that IE and Windows could not be decoupled in defending the U.S.
government's antitrust case against the company in the late 1990s.

As for the failure to align IE and .NET development, Ballmer indicated that they should be more tightly integrated in the future. "We got a whole lot of our innovation all coordinated and tied to the release of the next operating system after Windows XP. The browser was one of those technologies, .NET was not," he said.

As a result, .NET had a separate path. "Obviously, we could ship browsers separate
from the operating system, but we were really thinking through that next generation
design," Ballmer said. "There was a whole bunch of things that we have learned
from what we did during that design process. It's important to integrate things,
but it's probably important to incubate new technologies before you integrate
them together because we had the long gap."

Ballmer also acknowledged customer frustration with Vista and some of the performance
and compatibility issues that have plagued Microsoft's latest operating system.
"We did make the choice to kind of hurt compatibility and our customers have
let us know that that has been very painful," Ballmer noted. "We made a very
concrete set of choices in order to enhance the security. Vista is a very secure
system."

He added that with the release of the Vista service pack earlier this week, many of the compatibility issues had been addressed.

Perhaps most ironic was the format: He was interviewed by Guy Kawasaki, the
former Apple fellow and evangelist for the Macintosh platform.

"Whoever thought that I would ever be at a Microsoft event?" said Kawasaki, now a managing director with Garage Technology Ventures, a provider of capital to startups. "Not me," Ballmer replied.

When asked about Microsoft's interest in Yahoo, Ballmer insisted that Redmond
needs the scale to take on archrival Google.

Of particular interest: what the successful acquisition of Yahoo would mean
to the underlying PHP code that powers much of Yahoo's sites. Would the PHP
be converted to .NET or would Microsoft embrace PHP? Ballmer said such integration
issues would be premature to consider, but he hinted that PHP might have a role
in the combined enterprise.

"I think there will be a lot of innovation in the core infrastructure beyond
what we have in Windows today, and ASP.NET, beyond what you see in Linux and
PHP today," Ballmer observed. "Over time, probably most of the big applications
on the Internet will wind up being rebuilt and redone, whether those are ours
or Yahoo's or any of the other competitors, but for the foreseeable future,
we will be a PHP shop I guess if we own Yahoo, as well as being an ASP.NET shop."

When asked how quickly Silverlight will be ported to Microsoft's existing services such as Live Messenger and Hotmail, Ballmer said the company will be rolling it out onto various applications in the coming months. He stopped short of saying it would be released to older iterations of Microsoft's software and services.

"The truth of the matter is, we have all of the same installed base issues that everybody else does and it's only on a new release of one of the products that it makes sense to really go back and change the delivery platform," he explained. "Some of our applications get delivered today on rich Windows applications like Live Messenger [and there's] no real reason to move that to Silverlight. Some of the experiences you will see over time, all the relevant ones will move to Silverlight."

Pointed QuestionsHere are Ballmer's responses to some questions posed by Kawasaki and keynote
attendees:

Given Microsoft's interoperability pledge, why has it ended development
of IE on the Macintosh?
"At this stage of the game, we feel like it's smarter for us to apply our innovation
energy to doing new things as opposed to bringing yet another browser to the
Mac."

On the increased market share of Firefox:
"Firefox has certainly built presence and position over the course of the last
couple of years. You see us now investing as heavily as we ever had in the browser.
We certainly feel like browser innovation is core for that, and the ultimate
measure is how well we do versus Firefox and Safari and the other browsers."

Will Microsoft license Silverlight to Apple for the iPhone?
"Silverlight for iPhone is, of course, interesting. We want to get Silverlight
everywhere. Now, I can't say there's been some extensive discussion with Guy's
old boss [Apple CEO Steve Jobs] on this topic, and I notice they just announced
a new runtime and it sure seems they're trying to charge a whole lot more money
for it than anybody else on the face of the planet. I think they want 30 percent
of every bit of revenue that you collect on their runtime. It's a good business
if you can make it. I'm not sure a lot of the software developers that I know
are going to be very interested in that, but it may mean that Apple is not welcoming
open, royalty-free runtimes on its platform."

On social networking in the enterprise:
"We're certainly doing a lot of work around SharePoint, our collaboration product,
and Active Directory. It turns out we know already a lot about people and how
they relate to each other inside the enterprise. The ability to sort of let
that infrastructure find -- help you find colleagues, colleagues with shared
interests, much [like] the way social networking sites help you find friends,
people with similar interests on the broad Internet -- that's a big area of
investment for us. We've done a little bit in the version of SharePoint that's
in the market today, and you'll see more of that in future release of Office
and SharePoint. I'd say early stage today still."

Plans for Windows Mobile via its acquisition
of Danger Inc.:
"Windows Mobile today is a horizontal operating system. On top of that, we see
an opportunity to build unique applications with service components. Danger
really is part of a strategy to do consumer-oriented applications and services
on top of Windows Mobile, just like some of the things that we've done with
our enterprise software."

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.